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Legal & General to ‘cease production’ of new homes at modular factory

Legal & General (L&G) has announced that it will “reduce business activity” and halt production of new homes at its modular homes factory in Yorkshire, with the “majority” of staff facing the threat of redundancy.

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L&G will halt production of new homes at its modular factory
L&G will halt production of new homes at its modular factory
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Legal & General has announced it will “reduce business activity” and halt production of new homes at its modular homes factory in Yorkshire with the “majority” of staff facing the threat of redundancy #UKhousing

In an unscheduled announcement today, the insurance giant said it had “not been able to secure the necessary scale of pipeline to make the current model work”.

The news is potentially a significant blow for the UK’s fledgling modular homes sector, with L&G one of the highest-profile names in the space.

It comes after the collapse last year of House by Urban Splash – a joint venture between Manchester developer Urban Splash, Japan’s Sekisui House and Homes England.


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L&G blamed its modular business’ problems on long planning delays and the “impact of recent macro events such as COVID”.

The firm said it was starting consultation with all employees around the proposal to make the majority of roles redundant in its modular business. Inside Housing understands that the majority of 475 staff are potentially affected. 

However, it said it was “reviewing and assessing potential strategic options for the business”.

L&G Modular Homes, which was launched seven years ago, has racked up more than £100m in losses, and in its last reported full year to December 2021 it revealed a widening of post-tax losses to £29m. The firm operates from a 550,000 sq ft factory in Sherburn-in-Elmet, near Leeds.

Bill Hughes, chair of L&G Modular Homes, said: “Legal & General is proud of what we have achieved in bringing forward a new approach to construction through our factory.

“However, without the necessary scale of pipeline it is not sustainable to continue producing more modules. We are therefore reluctantly proposing to reduce business activity and cease production of new modules at the factory.”

Last summer L&G Modular unveiled its first big major standalone scheme in North Yorkshire, with housing association Yorkshire Housing taking 31 of the homes on the site in a £5.5m deal. 

Vivid also signed a five-year JV with L&G Modular last December to deliver around 1,000 homes. 

Today’s news comes just over three months since Sir Nigel Wilson said he planned to step down as boss of the wider Legal & General group, after more than a decade in charge.

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